Comparative Study On International Competitiveness Of Service Outsourcing Between China And India

With the development of global economy, world service trade has far exceeded the development of commodity trade. Service outsourcing is the most rapidly growing trade. Nowadays outsourcing has become a global trend. More and more enterprises are integrating outside resources in order to focus on core business and reduce costs. China and India are the main outsourcing country in the world. India, in the service outsourcing industry development, has achieved great success. India is the symbol of global outsourcing industry, and since the1990s has been leading the development trend of global industries. As developing country, India and China have a lot of similarities. But in service outsourcing, China and India have still a big gap.This paper is about the study, comparative of international competitiveness of service outsourcing between China and India. Firstly, this paper introduces the outsourcing situations of China and India. This paper makes a comparative analysis from qualitative and quantitative between the situations of service outsourcing competitiveness of China and India, and qualitative analysis use the modified "Diamond Model". To the factor of production, China’s infrastructure and human resources have a greater advantage, while India is superior to the location and the development of service outsourcing industry associations. To the demand condition, China’s domestic market has greater potential. To the related industries and support industries, China has a good manufacturing base and logistics system. India has more competitive information technology and financial system. To corporate strategy, India outsourcing business scale and development capabilities have a larger advantage than China. To the opportunities, India’s cost advantage is gradually weakened. But China has more room to develop market in Europe, America, Japan and South Korea. To the government, China and India governments are both actively developing policies to promote the development of service outsourcing industry. In quantitative analysis, the author use international market share index, the use of trade competitiveness index and the revealed comparative advantage index to compare China and India international competitiveness. The data shows that India’s service outsourcing industry has a comparative advantage. The last of the paper is basis on the experience of India and recording the experience puts forward several suggestions.